Cash boost eases Southern DHB's woes

Keeping the old Dunedin Hospital functioning until the new one is built has probably become a great deal easier for the Southern District Health Board as the cash-strapped organisation gets a cash injection as part of the Budget's health-funding booster.

SDHB chief executive Chris Fleming is awaiting detailed information about what the Budget numbers mean for the organisation, but at first glance, future planning will not be as fraught an exercise as it might have been.

"Keeping Dunedin hospital running for the next seven years requires a combination of capital expenditure and also meeting demand growth.

"We don't have those details yet; we expect to get funding envelopes in the next few days ... but certainly, it will improve our outlook compared to where it had been looking."

The SDHB recorded a $22million deficit in the last financial year, and has forecast a $17.5million deficit for the present one.

Yesterday's Budget upped health operational funding nationwide by $3.2 billion over the next four years.

In addition, up to $100 million in capital will be available, if required, in 2018-19 to strengthen DHB balance sheets through deficit support.

"The funding that has been announced will indeed help us, but it won't go all the way to addressing all the challenges which face us," Mr Fleming said.

"The DHB's budget is getting closer to a billion dollars now and we will have to prioritise how we go."

The new Dunedin hospital is expected to open in 2026.

Challenges remained ahead, specifically unsettled employment contract negotiations, such as with nurses, but DHBs had been sent a clear signal by the Government that it was expecting deficits to be reduced, Mr Fleming said.

The Budget initiative he was personally most excited about was the rise in primary care funding, a move neatly timed as the SHDB begins implementing a new primary care strategy.

"It appears funding will be targeted depending on individual circumstances, which I feel is fair and just," Mr Fleming said.

"It reinforces the importance of why we are focusing on that area: it's about what is right for the population, and what is right for services going forward."

Design finance set aside

Funding for the next stage of the Dunedin hospital build was set aside in the contingencies section of yesterday’s Budget, Health Minister David Clark said.

‘‘It’s not in the headline numbers because that money is for commercial negotiations,’’ Dr Clark said.

"When we are contracting with architects or whatever, we’re not saying ‘we’ve got this much money to spend’ - that’s what governments do.

‘‘There is money to get on with the project, you can bet your bottom dollar on that.’’

National health spokesman Michael Woodhouse said it was well-known the cost of the hospital would be between $1.2 and $1.6 billion and no amount that large was in the contingencies.